The price of Bitcoin has plunged 20% in the last 24 hours. Falling from its new all-time high of $58,000 on Sunday to just over $46,000 at press time.
Market analysts have called the leading cryptocurrency’s collapse a “price correction.” Though the reason for such a massive adjustment is not immediately clear.
Wild price fluctuations are a common issue for Bitcoin and other cryptocurrencies. This often happens when large amounts of capital pour into the market.
Altcoins such as Ethereum, Ripple, Litecoin, Bitcoin Cash, and Dogecoin additionally experienced significant losses. In total, more than $400 billion was wiped from the combined market capitalization of all cryptocurrencies.
Musk, Yellen to blame for Bitcoin plunge
Two people are to blame for the Bitcoin price crash. Tesla CEO Elon Musk and United States Treasury Secretary Janet Yellen.
Musk is one of the most influential people in the crypto world and can sway a digital asset’s price by simply tweeting about it. Over the weekend, he tweeted that Bitcoin’s price seemed too high. Not too long after that, it started correcting.
Yellen, meanwhile, called out Bitcoin for its role in funding illegal activities. She offered further criticism for how much power it takes to generate a single Bitcoin. Calling it an “extremely inefficient way of conducting transactions.”
Bitcoin price still up 500% since 2020
Despite the latest dip, Bitcoin’s price is still up by around 500% compared to this time last year. The market has been boosted by institutional investors entering the fray. As well as renewed interest from retail investors.
Major investments from firms like Tesla have added to Bitcoin’s emerging reputation as a form of digital gold. Which has seen it increasingly viewed as a store of value thanks to its fixed supply.
The price slide could attract fresh interest from investors who were waiting for the market to cool down. Some analysts maintain that Bitcoin’s price could rise above $100,000 in 2021.